Miller v. Commissioner Social Security Administration

Filing 33

ORDER: Granting Motion for Attorney Fees 29 , as follows: payment to plaintiff's counsel of $5,011.21 from plaintiff's retroactive benefits is approved. Signed on 6/22/2011 by Judge Ancer L. Haggerty. (sd)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION

RUTH ANN MILLER,
Plaintiff,

Civil No. 09-337-HA

v.

ORDER

MICHAEL J. ASTRUE,
COMMISSIONER of Social Security,
Defendant.

HAGGERTY, District Judge:
Plaintiff's counsel received an award for fees based upon the Equal Access to Justice Act
(EAJA) in the amount of $7,499.99 in early February 2011. Counsel now moves [29] for an
award for fees under 42 U.S.C. § 406(b) totaling $15,639.00.
When counsel for a Social Security claimant is entitled to awards under both statutes, the
claimant's attorney must refund to the claimant the amount of the smaller of the two payments.
Gisbrecht v. Barnhart, 535 U.S. 789, 796 (2002). There have been no objections from the
Commissioner to the fee motion, but this court is charged with the responsibility of determining
the reasonableness of the award being sought.
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I.

ANALYSIS

On September 23, 2010, Judgment was issued by this court finding that plaintiff is unable
to engage in any substantial gainful activity by reason of her impairments, and remanding this
case to the Commissioner for the proper calculation and award of Supplemental Security Income
Benefits and Disability Insurance Benefits on behalf of plaintiff. The Notice of Award from the
Commissioner was issued on February 21, 2011. On April 18, 2011 – just before expiration of
the sixty-day allowance recognized in Local Rule 4000-8 – plaintiff's counsel filed an application
for an award of attorney fees pursuant to § 406(b).
Upon entering a judgment in favor of a Social Security claimant who was represented by
an attorney, a court "may determine and allow as part of its judgment a reasonable fee for such
representation, not in excess of 25 percent of the total of the past-due benefits to which the
claimant is entitled by reason of such judgment." 42 U.S.C. § 406(b)(1)(A). Such fee awards are
paid from a claimant's retroactive benefits award. Id. An attorney receiving such a fee award
may not seek any other compensation from a claimant besides a § 406(b) fee. Id.
Under Gisbrecht, the court's first duty when considering whether to approve a
contingency fee agreement is to determine whether it is within the statutory 25 percent cap.
Here, counsel and his client executed a contingent-fee agreement that appears to be within the
statutory limits. See Ex. 2 in support of Counsel's Mem. Supp. 406(b) Fee Award.
Relatedly, the court then confirms that the fee amount sought by counsel is not more than
25 percent of the disabled person's retroactive benefits (§ 406(b)'s ceiling). Obviously, such a
determination requires evidence of the retroactive benefits awarded to the claimant. Here,
plaintiff's counsel seeks an award of $15,639.00, which counsel asserts is 25 percent of the
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calculation of his client's retroactive benefits. Mem. Supp. 406(b) Fee Award, p. 1. This is the
amount the Commissioner withheld from plaintiff's past due benefits to address the possibility
that counsel could seek a fee award of up to 25 percent of those past due benefits. See Ex. 1 in
support of Counsel's Mem. Supp. 406(b) Fee Award.
If the Commissioner's calculations and counsel's representations are correct, plaintiff
received a total retroactive benefit of $62,556.00. Counsel's requested 25 percent award would
be subject to a subtraction of $7,499.99, counsel's awarded EAJA fee, resulting in a net award
being sought of $8,139.01.
Although counsel has not voluntarily reduced his fee request to less than 25 percent
provided for in the contingency fee contract, that fact alone does not void the agreement. Fee
agreements that do not result in an award exceeding 25 percent of the benefits awarded to the
claimant may be upheld if it can be determined that the fee agreement yields "reasonable results"
under the applicable circumstances. Gisbecht, 535 U.S. at 807; see also Lewis v. Sec'y of Health
& Human Servs., 707 F.2d 246, 248-50 (6th Cir. 1983) ("[r]outine approval of the statutory
maximum allowable fee should be avoided in all cases. In a great majority of the cases, perhaps,
a reasonable fee will be much less than the statutory maximum.") (citation and internal quotation
omitted).
This court notes with approval the careful analysis provided by Magistrate Judge Acosta,
who recognized that "a twenty-five percent contingent-fee award is not automatic or even
presumed; 'the statute does not create any presumption in favor of the agreed upon amount.'"
Dunnigan v. Comm'r, No. Cv. 07-1645-AC, 2009 WL 6067058, *7 (D. Or. Dec.ember 23, 2009)
(quoting Gisbrecht, 535 U.S. at 807 n.17).
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Magistrate Judge Acosta further recognized the court's duty to review contingent-fee
arrangements as an independent check and to issue an affirmative judicial finding that the fee
allowed is reasonable. Id. (citation and internal quotation omitted). Upon a determination that
the fee agreement and the amount requested is within statutory limits, a court turns to "its
primary inquiry, the reasonableness of the fee sought." Id. at *10.
The burden rests with the plaintiff's counsel to establish the requested fee's
reasonableness. Gisbrecht, 535 U.S. at 807. As the Supreme Court noted, the real party in
interest in § 406(b) fee motions is the attorney, not the claimant. Id. at 798 n.6.
A court evaluating a counsel's showing of reasonableness under § 406(b) is instructed to
acknowledge the "primacy of attorney-client fee agreements." Id. at 793. However, contingent
fee agreements that fail to "yield reasonable results in particular cases" can be rejected. Id. at
807. The court may reduce a contingent fee "based on the character of the representation and the
results the representative achieved." Id. at 808. For example, a contingent fee award may be
reduced if the attorney provided substandard representation, engaged in dilatory conduct that
increased the accrued amount of past-due benefits, or if the benefits were disproportionate to the
amount of time the attorney spent on the case. Id.
The Ninth Circuit issued an en banc decision addressing the § 406(b) reasonableness
analysis under Gisbrecht. See Crawford v. Astrue, 586 F.3d 1142 (9th Cir. 2009). The Crawford
majority emphasized that the Supreme Court has provided a "clear directive" that a district court
should begin its analysis with examining the attorney-client fee agreement, and then apply any
appropriate reductions to the calculated contingency fees, for purposes of arriving at a reasonable
fee.
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The Ninth Circuit articulated four factors derived from the Gisbrecht analysis that district
courts should use in determining whether a reduction from the contingent-fee agreement is
appropriate:
1.

the character of the representation, specifically, whether the representation was
substandard;

2.

the results the representative achieved;

3.

any delay attributable to the attorney seeking the fee; and

4.

whether the benefits obtained were "not in proportion to the time spent on the case" and
raise the specter that the attorney would receive an unwarranted windfall.

Crawford, 586 F.3d at 1151-53 (citations omitted).
In other words – despite the primacy afforded to the fee contract created between counsel
and client – courts are empowered to exercise discretion to ensure that the claimant is protected
from having to surrender retroactive disability benefits in a disproportionate payment to counsel.
Id. at 1151 (citing Gisbecht, 535 U.S. at 808).
1.

The Character of Representation

Substandard performance by a legal representative may warrant a reduction in a § 406(b)
fee award. See Gisbrecht, 535 U.S. at 808; Crawford, 586 F.3d at 1151. The Supreme Court has
instructed that this aspect of the reasonableness analysis emphasizes whether the character of the
plaintiff's representation was substandard. Gisbrecht, 535 U.S. at 808 (citing Lewis, 707 F.2d at
248-50. The Lewis court considered the counsel's poor preparation for hearings, failures to meet
briefing deadlines, submissions of court documents void of legal citations, and misconduct in
over-billing the claimant to amount to substandard representation. Id.

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The record in this case fails to reveal that counsel's conduct in this case was in any way
as egregious as the kind of representation considered by the court deciding Lewis. The record in
this case provides no basis for a reduction in the requested § 406(b) fee due to the character of
counsel's representation.
2.

Results Achieved

Here, counsel won a remand for purposes of calculating and awarding benefits for the
claimant. However, a successful result – even obtaining an order for an award of benefits –
should not be viewed in isolation, and does not compel a fee award of 25 percent of a claimant's
retroactive benefits award:
If [a successful result] always supported awarding fees for the full twenty-five
percent, it would make irrelevant the other Gisbrecht factors and render
perfunctory the trial courts' assigned task of "making reasonableness
determinations in a wide variety of contexts[.]"
Dunnigan, 2009 WL 6067058, at *12 (quoting Gisbrecht, 535 U.S. at 808).
3.

Delays

A court may reduce a § 406(b) award for delays in proceedings attributable to the
claimant's counsel. See Gisbrecht, 535 U.S. at 808; Crawford, 586 F.3d at 1151. The
Gisbrecht Court reasoned that a reduction of a requested fee is appropriate under § 406(b) in
cases in which the requesting attorney could profit from the accumulation of benefits by
inappropriately causing delay in the proceedings while the case is pending. Gisbrecht, 535
U.S. at 808 (citing Rodriguez v. Bowen, 865 F.2d 739, 746-47 (6th Cir. 1989)).
Here, plaintiff sought and obtained one forty-five day extension for filing an Opening
Brief. No evidence in the record suggests that the extension was intended, even in part, to

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unfairly delay the proceedings in this case. Accordingly, reduction of a fee request based upon
25 percent of the claimant's retroactive benefits award under this factor alone is not warranted.
The court notes that counsel contends that a "significant delay in payment" of benefits
occurred in this case, and that because "[m]uch of the work on this case was performed months
ago . . . an increase in what otherwise would be a reasonable fee" is warranted. Counsel's Mem.
Supp. 406(b) Fee Award at 9 (emphasis in original). This court declines counsel's invitation to
inflate "otherwise reasonable" fee awards based upon a purported delay in agency payment of
benefits. Moreover, counsel allowed nearly all of the sixty days allowed for seeking an award of
fees to expire before filing this motion. The argument that delay in receiving payment should
increase a reasonable award is, therefore, rendered even less persuasive.
4.

Proportion

A district court may reduce a § 406(b) award if "benefits . . . are not in proportion to the
time spent on the case." Crawford, 586 F.3d at 1151 (citing Gisbrecht, 535 U.S. at 808). The
Supreme Court explained that "[i]f the benefits are large in comparison to the amount of time
counsel spent on the case, a downward adjustment is . . . in order." Gisbrecht, 535 U.S. at 808;
see also Stokes v. Comm'r of Social Sec. Admin., No. 10-35628, 2011 WL 1749064, at *1 (9th
Cir. May 9, 2011) (it is proper for a court to focus on the complexity and risk involved in the
specific case at issue to determine how much risk was assumed in taking the case, and
disregarding an attorney's arguments about general policy considerations and the generally high
risks in litigating social security cases is not an abuse of discretion); quoting Crawford, 586 F.3d
at 1153.

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Counsel claims he expended 46.55 hours in his efforts to recover retroactive benefits for
plaintiff and to obtain current benefits and insurance for his client. In light of the size of the
retroactive benefits recovered in relation to a reasonable estimate of the complexity of the
representation, and the estimated number of hours that should have been necessary to fairly
conduct that representation, a reduction of the maximum fee allowable under the applicable
statute is warranted.
This conclusion is based upon the circumstances presented, including an evaluation of the
complexity of the issues presented after administrative adjudication of plaintiff's application for
benefits. Counsel for plaintiff was zealous and effective in overcoming the defenses presented
by opposing counsel on behalf of the Commissioner. However, the challenges of litigating the
existence of errors committed by the Administrative Law Judge (ALJ) regarding plaintiff's
impairments were relatively simple. The record of the case established that plaintiff not only
suffers from significantly subaverage general intellectual functioning with deficits in adaptive
functioning with an onset before the age of twenty-two, as conceded by defendant, but also that
plaintiff suffers from other impairments that impose additional and significant work-related
limitations of function. Plaintiff's other severe impairments – which were acknowledged by the
ALJ – satisfied Listing 12.05(C), and the litigation of the ALJ's error in failing to conclude that
plaintiff's severe impairments meet a Listing of Impairment was insufficiently complex to
warrant a full fee award of the maximum amount allowed under law. Instead, this court is
compelled to award a smaller percentage in calculating a fee award to avoid a disproportionate
windfall to counsel and to prevent a disabled client from incurring a disproportionate loss of
benefits for legal representation.
Page 8 - ORDER

This result is consistent with the court's statutory duty to assess the reasonableness of this
kind of contingent fee, and with the guidance provided by the Supreme Court and the Ninth
Circuit. This court concludes that the concerns about proportionality are not allayed by the risks
counsel undertook in representing this plaintiff, under the complexity and circumstances
presented. See Stokes, 2011 WL 1749064, at *1-*2.
II.

FEE CALCULATION

This court accepts the reasonableness of the hours billed for this litigation (46.55 hours).
However, the court concludes that an award of 25 percent of plaintiff's retroactive benefits results
in a disproportionate windfall for counsel. Instead, after examining the record and the factors
considered in determining the reasonableness of fee awards, the court concludes that counsel's
fee award should total 20 percent of the alleged retroactive benefits award. Accordingly, counsel
is awarded $5,011.21. This amount equals 20 percent of the retroactive award of $62,556.00
($12,511.20), minus $7,499.99, counsel's awarded EAJA fee.
III.

CONCLUSION

Counsel's § 406(b) attorney fee motion [29] is granted as follows: payment to plaintiff's
counsel of $5,011.21 from plaintiff's retroactive benefits is approved.
IT IS SO ORDERED.
Dated this 22nd day of June, 2011.

/s/ AncerL. Haggerty
Ancer L. Haggerty
United States District Judge

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